Although they don’t make lending decisions or determine your credit scores, the credit bureaus play an essential role in creating and maintaining the credit system. And if you’ve taken out a loan, used a credit card, or had an account sent to collections, there’s a good chance one (or several) of the credit bureaus have your information in its system.
What are the top three credit bureaus?
The three major consumer credit bureaus in the United States are Equifax, Experian and TransUnion. Collectively, they’re sometimes called the three nationwide credit reporting companies or credit reporting agencies. They’re also commonly referred to as credit bureaus.
Although people often clump the credit bureaus together when discussing credit, the companies are competitors. Each of the three credit bureaus creates and maintains its own credit files — databases filled with information about consumers and the consumers’ history with credit.
How credit bureaus work
Focusing on their role within consumer credit reporting, the credit bureaus primarily collect and organize data about consumers. The credit bureaus sell credit reports, a compilation of the information they have about a single consumer, to organizations and people. They also sell additional products and services, including credit scores based on their credit reports.
Most of the information in the credit bureaus’ credit files comes from other companies, such as banks, lenders, credit card issuers and collection agencies. Collectively, these organizations are called data furnishers.
When you apply for a new credit account, the company with which you’re applying for the account might request a copy of your credit report from the bureau and report the information from your application to the bureau — such as your name, address and Social Security number. If you aren’t already in that credit bureau’s system, the application could trigger the creation of your credit file using this personal information.
Once you have an open account, the creditor may also send updates to the credit bureau. For example, every thirty days, it might report your account’s current balance, most recent payment, and any changes to your account or personal information.
The credit bureaus also collect (or work with a third party to collect) information from public records. Public records used to include judgments and liens, but the only public records you’ll find on credit reports today are bankruptcy filings. However, creditors can still buy the other types of public records with supplemental reports.
Why are my credit reports different?
Your credit reports from Equifax, Experian, and TransUnion might be different because some data furnishers only report to one or two of the bureaus.
Data furnishers aren’t required to report information to any of the bureaus — they can choose which bureaus to report to, if any, and which information to send. For example, if you open a credit card with your local credit union, the credit union might only report your account to TransUnion. As a result, the account won’t appear in your Equifax or Experian credit reports.
Credit reports can also be different because creditors commonly only check one of your credit reports when you apply for a new credit account. The credit check can lead to a soft or hard inquiry — a record of the credit check — that’s only added to that report.
Additionally, some services now let you opt in to adding information to your credit reports. For example, you can use Experian Boost to add on-time payments for certain services such as rent and eligible streaming subscriptions to your Experian credit report. These payments might increase credit scores that are based on your Experian credit report. But the payments don’t get added to your other two credit reports and won’t affect scores based on those reports.
How lenders use your credit report
Lenders often request your credit report when you first apply for a loan and regularly review your credit report to help manage your account.
When you’re applying for a loan, the creditor might use your credit report and a credit score based on the report to help determine your creditworthiness. Along with other information from your application, such as your income, they can decide whether to approve your application and your offer’s terms.
Once your account is open, the lender might periodically report your account information and monitor your credit reports. For example, if you have a line of credit, the creditor might lower your credit limit if it sees you’re having trouble making your other payments.
Disputing credit report errors or inaccurate information
Although the information in credit reports is largely accurate, errors can occur. These can happen when data furnishers report inaccurate information to the credit bureaus, when credit bureaus don’t remove incorrect or old information or when credit files of two people who have similar personal information get mixed up.
If you find an error or inaccurate information, you can send a dispute to the credit bureau. The easiest way to do this may be through the bureau’s online dispute systems: Equifax, Experian, and TransUnion all offer the ability to file a dispute online. The bureau will then investigate your dispute and either update, delete or verify the information.
Other credit bureaus to know
Equifax, Experian and TransUnion are the main nationwide credit bureaus, but they aren’t the only bureaus or consumer reporting companies.
Innovis is sometimes called the fourth credit bureau, and it similarly collects consumers’ credit data. However, companies primarily use Innovis’s credit reports for identity verification and fraud detection instead of assessing credit risk.
There are also dozens of specialty credit reporting companies that collect and sell data. Some of these specialize in certain types of information, such as medical, rent, or utility payments. Others focus more broadly on a non-credit industry, such as insurance or employment screening.
The Consumer Financial Protection Bureau (CFPB) maintains a list of these consumer reporting companies. As with your consumer credit reports, you may have the right to a free copy of your report from each of these companies at least once every 12 months. You may also be able to freeze your report with some of the companies to help protect yourself from identity theft. The CFPB report includes information on how to request these reports and freezes.
Why your credit score is important
Credit scores are important because many companies will base your credit offers on your score. They might require you to have a minimum credit score to qualify for a loan or credit card and use your score to help determine how much interest or fees to charge you.
FICO and VantageScore create the commonly used credit scoring models that analyze your credit reports and generate scores. Creditors buy these scores from Experian, Equifax or TransUnion, but the bureaus don’t create or determine the scores.
Frequently asked questions (FAQs)
All three of the major credit bureaus — Equifax, Experian, and TransUnion — are important. Creditors can choose which of your credit reports to request and use when you apply for a new credit account, so no bureau is more important than the others.
There are many types of credit scores and each of your scores is based on the information from one of your credit reports. Your credit scores can vary depending on the type of score and which underlying credit report it’s analyzing. Scores might use different rules or data and some could be more predictive than others, but they’re all accurate.
Banks and other lenders might request your credit report from different credit bureaus depending on different factors, such as where you live and the company’s current agreement with the credit bureaus. If they can’t get your credit report from one bureau, they might attempt to get it from another.
Creditors can set their own ratings for what they consider to be a good credit score, and the result may partially depend on the type of credit score. However, in general, a credit score in the high 600s is considered a good credit score.
Credit rating agencies are generally companies that assess the creditworthiness of other companies and financial products. The big three ratings agencies are S&P Global Ratings, Moody’s and Fitch Group. The big three consumer credit bureaus — Equifax, Experian, and TransUnion — create consumer credit reports that companies can use to assess the creditworthiness of individuals.
FAQs
What are the three credit bureaus: Equifax, Experian, and TransUnion? ›
Equifax, Experian, and TransUnion, the top three U.S. credit bureaus, are private companies that collect and sell credit information on individual consumers to lenders and others. While the three bureaus have similar functions, they also have some differences, including in the information they report.
What are the 3 reporting agencies for credit scores? ›By law, you can get a free credit report each year from the three credit reporting agencies (CRAs). These agencies include Equifax, Experian, and TransUnion. Due to financial hardship resulting from the COVID-19 pandemic, you can get a free credit report each week through December 2023.
Which of the 3 credit bureaus is most important? ›There's no “most important” credit bureau. Reviewing reports from all three bureaus can help you understand what information might be used to calculate your credit scores. But remember, lenders have their own criteria to decide on things like loan and credit applications.
What is the best site to get all 3 credit reports? ›You have the right to request one free copy of your credit report each year from each of the three major consumer reporting companies (Equifax, Experian and TransUnion) by visiting AnnualCreditReport.com. You may also be able to view free reports more frequently online.
Which credit bureau is most accurate? ›Although Experian is the largest credit bureau in the U.S., TransUnion and Equifax are widely considered to be just as accurate and important. When it comes to credit scores, however, there is a clear winner: FICO® Score is used in 90% of lending decisions.
Which credit score matters more TransUnion or Equifax? ›No credit score from any one of the credit bureaus is more valuable or more accurate than another. It's possible that a lender may gravitate toward one score over another, but that doesn't necessarily mean that score is better.
What credit score is most important? ›FICO scores are generally known to be the most widely used by lenders. But the credit-scoring model used may vary by lender. While FICO Score 8 is the most common, mortgage lenders might use FICO Score 2, 4 or 5. Auto lenders often use one of the FICO Auto Scores.
Do banks go by TransUnion or Equifax? ›In conclusion. Credit card issuers and lenders may use one or more of the three major credit bureaus—Experian, TransUnion and Equifax—to help determine your eligibility for new credit card accounts, loans and more.
Which is better Equifax or Experian? ›More companies use Experian for credit reporting than use Equifax. This alone does not make Experian better, but it does indicate that any particular debt is more likely to appear on an Experian reports.
Which is better Equifax Experian or TransUnion? ›Of the three main credit bureaus (Equifax, Experian, and TransUnion), none is considered better than the others. A lender may rely on a report from one bureau or all three bureaus to make its decisions about approving your loan.
How do I unlock all 3 credit reports? ›
If you froze your credit report with each of the major credit bureaus — Experian™, Equifax® and TransUnion® — you'll need to contact all three individually. You may also need the PIN or password you received when you initially froze your credit. Keep in mind, a credit freeze and credit lock are different.
Does Credit Karma show all 3 credit bureaus? ›Credit Karma offers free credit reports from two of the three major consumer credit bureaus, Equifax and TransUnion. But if you've never seen your credit reports before, you might not understand what you're looking at.
How accurate is credit karma? ›Here's the short answer: The credit scores and reports you see on Credit Karma come directly from TransUnion and Equifax, two of the three major consumer credit bureaus. The credit scores and reports you see on Credit Karma should accurately reflect your credit information as reported by those bureaus.
How far off is Credit Karma? ›Well, the credit score and report information on Credit Karma is accurate, as two of the three credit agencies are reporting it. Equifax and TransUnion are the ones giving the reports and scores. Credit Karma also offers VantageScores, but they are separate from the other two credit bureaus.
Why is my Experian score so much higher than TransUnion? ›When the scores are significantly different across bureaus, it is likely the underlying data in the credit bureaus is different and thus driving that observed score difference.
Why is my Experian score 100 points higher than Equifax? ›This is due to a variety of factors, such as the many different credit score brands, score variations and score generations in commercial use at any given time. These factors are likely to yield different credit scores, even if your credit reports are identical across the three credit bureaus—which is also unusual.
Which credit score is used to buy a house? ›The most commonly used FICO Score in the mortgage-lending industry is the FICO Score 5. According to FICO, the majority of lenders pull credit histories from all three major credit reporting agencies as they evaluate mortgage applications. Mortgage lenders may also use FICO Score 2 or FICO Score 4 in their decisions.
Which credit score is used to buy a car? ›The FICO score is the most widely used score for auto loans. The score ranges from 300 to 850. The score is calculated based on credit mix, payment history, amount owed, average credit history and available credit.
What credit score is good for buying a house? ›It's recommended you have a credit score of 620 or higher when you apply for a conventional loan. If your score is below 620, lenders either won't be able to approve your loan or may be required to offer you a higher interest rate, which can result in higher monthly payments.
What is the average US credit score? ›Credit scores are three-digit numbers that show an important piece of your financial history. Credit scores help lenders decide whether to grant you credit. The average credit score in the United States is 698, based on VantageScore® data from February 2021. It's a myth that you only have one credit score.
Which credit score do banks use? ›
They are Experian, Equifax and CIBIL. CIBIL is quite popular as it has been in the business for a long time. Non-Banking Financial Companies and banks use the credit score provided by CIBIL, Experian and Equifax to determine the potential risk of lending to a customer.
Is Experian or Credit Karma more accurate? ›Experian vs. Credit Karma: Which is more accurate for your credit scores? You may be surprised to know that the simple answer is that both are accurate. Read on to find out what's different between the two companies, how they get your credit scores, and why you have more than one credit score to begin with.
Do car loans use Equifax or TransUnion? ›What credit score do auto lenders look at? The three major credit bureaus are Experian, TransUnion and Equifax. The two big credit scoring models used by auto lenders are FICO® Auto Score and Vantage.
What credit card pulls from Equifax? ›Credit Cards That Use Equifax
Some of the major credit card companies that use Equifax include American Express, Bank of America, Capital One, Chase, Citi, Discover, and Wells Fargo. These companies use Equifax to verify your identity, check your credit history, and evaluate your credit score.
A score of 661 – 720 is fair. And an excellent score is in the range of 781 – 850. Think of these rankings and ranges as guides, not hard-and-fast rules for what good credit is. Some people want to achieve a score of 850, the highest credit score possible.
Is Credit Karma a FICO score? ›If you are viewing your score on Credit Karma, the score you see is VantageScore® 3.0. While VantageScore® credit scores aren't used as widely as FICO® scores for credit decisions, they can still give you a good idea of where your credit stands.
What is the highest credit score you can get with Equifax? ›What are the Equifax credit score ranges? The Equifax Credit Score ranges from 280-850. It is calculated using information in your Equifax credit report. The Equifax credit score is an educational credit score designed to give you an idea of where your credit stands.
What is FICO score vs credit score? ›Is "credit score" the same as "FICO® score"? Basically, "credit score" and "FICO® score" are all referring to the same thing. A FICO® score is a type of credit scoring model. While different reporting agencies may weigh factors slightly differently, they are all essentially measuring the same thing.
Which credit report is usually the lowest? ›Your Equifax score is lower than the other credit scores because there is a slight difference in what is reported to each credit agency and each one uses a slightly different method to score your data. Your Experian, Equifax and TransUnion credit reports should be fairly similiar.
What is FICO stand for? ›FICO stands for the Fair Isaac Corporation. FICO was a pioneer in developing a method for calculating credit scores based on information collected by credit reporting agencies.
What lenders use TransUnion only? ›
- Avianca.
- Apple Card - Goldman Sachs Bank.
- Barclays.
- Capital One.
- Synchrony Bank.
- U.S Bank.
The 15/3 credit card hack is a payment plan that involves making two payments during each billing cycle instead of only one. Anyone can follow the 15/3 plan but it takes some personal management and discipline. The goal is to reduce your credit utilization rate and increase your credit score.
Do banks pull all 3 credit reports? ›Bottom line. When you apply for a new credit card, your issuer will pull data from one of the “big three” credit reporting agencies. Because there are differences in the information from each agency (and therefore variation in your scores from each), it's important to stay updated on your credit score at each company.
How to get 999 credit score? ›To get a 999 credit score, you ideally need to have a credit history that spans several years. You might think that if you've never borrowed before and never had debt, this will work to your advantage. But in fact this means you'll have little to no credit history.
What's a perfect credit score? ›A perfect credit score of 850 is hard to get, but an excellent credit score is more achievable. If you want to get the best credit cards, mortgages and competitive loan rates — which can save you money over time — excellent credit can help you qualify. “Excellent” is the highest tier of credit scores you can have.
Is Experian the most accurate credit score? ›While Experian is the largest bureau in the U.S., it's not necessarily more accurate than the other credit bureaus. The credit scores that you receive from each of these bureaus could be the same, depending on which scoring model they use.
What is an excellent credit score? ›Although ranges vary depending on the credit scoring model, generally credit scores from 580 to 669 are considered fair; 670 to 739 are considered good; 740 to 799 are considered very good; and 800 and up are considered excellent.
Why is my FICO score 100 points lower than Credit Karma? ›Some lenders report to all three major credit bureaus, but others report to only one or two. Because of this difference in reporting, each of the three credit bureaus may have slightly different credit report information for you and you may see different scores as a result.
Is Experian FICO score accurate? ›Credit scores from the three main bureaus (Experian, Equifax, and TransUnion) are considered accurate. The accuracy of the scores depends on the accuracy of the information provided to them by lenders and creditors. You can check your credit report to ensure the information is accurate.
Why is my Experian score so much higher than Credit Karma? ›This is mainly because of two reasons: For one, lenders may pull your credit from different credit bureaus, whether it is Experian, Equifax or TransUnion. Your score can then differ based on what bureau your credit report is pulled from since they don't all receive the same information about your credit accounts.
What is a bad credit score Credit Karma? ›
A credit score of 600 or below is generally considered to be a bad credit score. And if your credit is low, you may qualify for a loan but the terms and rates may not be favorable. Credit scores between 601 and 669 are considered fair credit scores.
How many points is a good credit score on Credit Karma? ›| Credit score ranges | Rating |
|---|---|
| 580–669 | Fair |
| 670–739 | Good |
| 740–799 | Very good |
| 800–855 | Exceptional |
Credit card companies, for example, usually report by a recurring date known as the billing cycle or statement date. But the exact day of the month may be different for each provider. In short, there's no set day that all lenders deliver information to the CRAs.
What is the lowest credit score on Experian? ›Accessing your Experian credit report can be done at home by visiting the website and requesting your free credit report and FICO score. This score is represented as a number between 300 (poor) and 850 (exceptional).
What is FICO score 8? ›The FICO Bankcard Score 8 is a FICO® Score that's created specifically for credit card issuers to help them understand the likelihood that a borrower will be 90 or more days late on a credit card payment in the next 24 months. The score has a wider scoring range—250 to 900—than the base FICO® Score range of 300 to 850.
Do all 3 credit reports have the same information? ›While all three credit bureaus generally collect similar types of information and provide similar services (such as identity monitoring, financial tools and credit scores), they differ slightly. The main differences come down to the credit score calculations used and how they process information.
What is the score limit for Experian? ›We provide a score from between 0-999 and consider a 'good' score to be anywhere between 881 and 960, with 'fair' or average between 721 and 880. Before you apply for credit, it's a really good idea to check your free Experian Credit Score, so you can make more informed choices when it comes to applying for credit.
What is the highest Experian score possible? ›The Perfect Credit Score May Vary
That's correct with respect to the generic FICO® Score☉ used in most lending decisions, but it's not always the right answer to the question. The generic FICO® Score has a score range of 300 to 850, so a perfect score on that scale is, of course, 850.
Experian and FICO aren't the same thing. Experian is a credit reporting agency that also offers consumer credit monitoring products. FICO is a scoring model. A service called myFICO offers similar consumer credit monitoring products to Experian.
What is the difference between Equifax and TransUnion? ›TransUnion uses the VantageScore® model when calculating your credit score, based on a range of 300 – 850. A “good” score may rest in the 661 – 720 range. Equifax, meanwhile, uses its own scoring model with a range of 280 – 850, with “good” being 670 – 739 and higher. Their algorithm closely resembles the FICO® model.
What is the difference between the 3 credit reporting agencies? ›
While all three credit bureaus generally collect similar types of information and provide similar services (such as identity monitoring, financial tools and credit scores), they differ slightly. The main differences come down to the credit score calculations used and how they process information.
How do I contact all 3 credit bureaus? ›Equifax: 1-800-685-1111; Equifax.com/personal/credit-report-services. Experian: 1-888-397-3742; Experian.com/help. TransUnion: 1-888-909-8872; TransUnion.com/credit-help.
What is the difference between Equifax and Experian TransUnion? ›Experian gives a more detailed picture of a person's financial history, including payment timeliness and debt utilization. TransUnion offers more insight into a person's job history, whereas Equifax provides more information about mortgage history.
Is Experian more accurate than Equifax or TransUnion? ›Of the three main credit bureaus (Equifax, Experian, and TransUnion), none is considered better than the others. A lender may rely on a report from one bureau or all three bureaus to make its decisions about approving your loan.
What are the three 3 companies that handle most credit reporting? ›There are three big nationwide providers of consumer reports: Equifax, TransUnion, and Experian. Their reports contain information about your payment history, how much credit you have and use, and other inquiries and information.
How accurate is Credit Karma? ›Here's the short answer: The credit scores and reports you see on Credit Karma come directly from TransUnion and Equifax, two of the three major consumer credit bureaus. The credit scores and reports you see on Credit Karma should accurately reflect your credit information as reported by those bureaus.
Do I need to call all 3 credit bureaus to freeze my credit? ›You must contact each of the three credit bureaus to freeze your credit. Creating free online accounts with each bureau is the quickest way to manage your freezes. Alternatively, you can contact the bureaus via phone or mail.
Which credit score is more accurate FICO or Experian? ›Experian's advantage over FICO is that the information it provides is far more detailed and thorough than a simple number. A pair of borrowers could both have 700 FICO Scores but vastly different credit histories.
Which is better Experian or Equifax? ›More companies use Experian for credit reporting than use Equifax. This alone does not make Experian better, but it does indicate that any particular debt is more likely to appear on an Experian reports.
Why is Experian score higher than Credit Karma? ›Why is my Experian credit score different from Credit Karma? To recap, Credit Karma provides your Equifax and TransUnion credit scores, which are different from your Experian credit score.